America West Resources to acquire Chinese coking coal plant
US coal producer America West Resources has signed a binding Letter of Intent to acquire the coking coal operations (Luxin) of Shanxi Jiexiu Luxin Coal Gasification Company (Shanxi Jiexiu), an established diversified holdings company based in Shanxi Province, China, which also owns coal mines and a major coal trading operation.
Luxin operates a state-of-the-art coking coal plant in Shanxi Province with annual production capacity of 600,000 metric tons. Built in 2005, the plant utilises technology that in addition to producing coke, generates electricity using synthetic gas produced through coal gasification.
In the US, coal gasification, which also makes post-combustion carbon capture easier, is a significant area of current energy research that has benefited from the US$3.4B in federal stimulus funds marked for fossil fuels research.
According to a Reuter's news report, demand from steelmakers for coking coal is rebounding from last year's recession, especially in China. The article cites industry authorities who project that Asian consumption will increase to 8 bt from 6 bt in the next 20 years.
Dan Baker, CEO of America West Resources, stated, "Through the acquisition of the majority interest in Luxin and the vertical integration of its coking coal plant into our operating platform, America West effectively diversifies our business, establishes a critical gateway to China, and materially strengthens our financial profile.
"As such, we believe we are much better positioned to pursue a listing on a national exchange on an accelerated timetable. Moreover, because this acquisition is ideally aligned with our Company's long term met coal export strategy, America West looks forward to optimising our met coal assets while further strengthening 'westward' coal export to Asia through U.S. west coast channels."
